Federal Facilities Council Forum for Alternative Work Arrangements: Private Sector Practices

Transcription

1 Federal Facilities Council Forum for Alternative Work Arrangements: Private Sector Practices Implementing Alternative Workplace: A Change Management Approach Martha O Mara PhD, CRE Managing Director, Corporate Portfolio Analytics October 11, 2011

2 Today s Discussion: It s About the How rather than just the What Alternative Workplace no longer alternative Most Fortune 500 Companies pursuing in one form or another. Federal government Telework Act of 2010 mandating agencies enable telework policies. However, viewing AWA as a real estate solution is misleading It is more about process, less about design. Why don t we see more success stories? Why don t we see any good pictures? Forget about the what, what about the how? Gathered senior corporate real estate mangers from five Fortune 200 companies and a dozen Federal agencies to share experiences implementing AWA one day workshop Focus on the Change Management challenge Eight Steps to Transforming Your Organization by John Kotter, Harvard Business Review Facilitated discussion of each step, share the highlights with you today. 2/6/2013 2

3 The Perfect Storm Cost & Performance of Mobility Tools Demographics: younger workers work-styles Lag between our workplaces and the work that we actually do Sustainability & Carbon reduction Operating Cost Reduction $$ 2/6/2013 3

4 Getting the Story Straight Not telework Not fuzzy slippers Not all butts in boxes Space Time Individual Space Group Space Pre-assigned cave personal harbor benching/clustering Individual office sequential shared offices commons group address flexible conference rooms /libraries lounges, nooks Ca Assigned as needed hoteling just in time offices telecenters / satellite offices same options as above contingent spaces: hotel rooms, client premises, etc. 2/6/2013 4

5 AWA utilization expected to greatly increase Alternative workplace strategies (where a range of flexible workplace settings are provided for an employee s work in places that are not assigned individually) are available for: Alternative Workplace Strategies (Current) 20% -40% of the workforce 15% >40% of the workforce 13% 10% -20% of the workforce 29% < 10% of workforce 43% Alternative Workplace Strategies (Future) Within the next five years what proportion of employees at your organisation could be utilising alternative workplace arrangements. > 40% of the workforce 37% < 10% of workforce 18% 10-20% of the workforce 20% 20-40% of the workforce 25% Corporate Real Estate Impact on Enterprise Success survey of 40 global corporations representing 3.6 m people supported and 2.2 billion square feet 2/6/2013 5

6 Eight Stage Change Management Process Establish a Sense of Urgency Form a Powerful Guiding Coalition Create a Vision Communicate the Vision Empower Others to Act on the Vision Plan for and Create Short-Term Wins Consolidate Improvements and Produce Still More Change Institutionalize New Approaches Based on John Kotter s work 2/6/

7 Step 1: Establish a sense of urgency What problems or issues can be solved by AWA? Current and potential crises and opportunities. How can AWA help the organization perform better? Cost focus Show we pay for space we do not use Lease turnovers provide a clear deadline and quantifiable benefit Reduced internal churn Human resources focus Wider access to labor markets Greater employee satisfaction and retention Work process improvement Support what is already happening people work mobile already It really is about changing the way we work real estate is just an ancillary benefit. Making the argument: Portfolio analytics Surveys DATA DATA DATA 2/6/2013 7

8 Office Usable Square Feet / FTE Demonstrate that assets are currently underutilized The average utilization of assets in the portfolio is 218 usable square feet per FTE, which is 45% higher than the recommended target of 150 usf/fte. Legacy owned buildings are especially inefficient at 261usf/FTE A simple histogram can tell the story Note: CPAnalytics experience with private and public sector clients in North America and Europe, which has been confirmed by industry reports, has found that a building utilization metric of 150 USF/FTE or lower is achievable. July 27, 2/6/

9 SF/ Occupant Differences across Lines of Businesses and Regions Internal benchmarking of portfolio performance highlights where the biggest opportunities to add value through AWA may be. High Improvement Higher current Performance Opportunity Owned portfolio most underutilized Owned Legacy acquisition Increase utilization in these regions Leased Total Portfolio Total Portfolio Total Portfolio Tenure Business Unit Subregion Density = Area / Total of assigned contractors and employees. 2/6/

10 Survey employees to understand how and when they use their assigned office Develop a survey program early to guide workplace and process decisions. Document pre and post AWA implementation impact. Compare employee satisfaction and performance measures to type of work-style used, controlling for basic demographics. In a typical work week, how much of your work time is spent in the following locations? (Include commuting time as work time) Please estimate a percentage of your time so that it totals to 100% 100% In my assigned Company office location In my car commuting to and from work or to and from a customer or vendor At a customer or vendor s location Working from home At a Company location other than my assigned location Working from a location that is not a Company office, customer or vendor, or home Other ( ) please indicate 2/6/

11 Step 2: Form a powerful guiding coalition Powerful representatives from many parts of the organization that lead the change effort. A diverse team of champions from varying stakeholders that need to be involved in the change. If support is centralized, you have a bigger hammer. Companies who have already successfully implemented AWA programs included members from corporate real estate, human resources, and information technology. IT participation is critical because technology enables AWA. If you have unions, involve them in the process early and have a representative in the guiding coalition. When senior management walks the talk, change is accelerated. 2/6/

12 Stakeholder impact analysis How will offering alternative workplace strategies help build and maintain competitive advantage? What is good for the business? Real Estate Factors Human Resource Factors Strategic Financial Operational Individual Redeploy capital to core business Operating cost reduction Locations based upon use, function Work settings that support the way work is done Greater geographical access to labor markets Cost savings to employees from commuting Access to a more diverse workforce through flexible schedules More personal choice regarding schedule, work-style 2/6/

13 Step 3: Create a vision The vision must be flexible enough to appeal to different motivations, allowing each part of the business that is affected to see what is in it for them. Policy vision: Do we provide financial support for mobility tools? Supervision, performance measurement, communication norms Physical vision: If you can t explain it in less than five minutes, you re losing Use multiple strategies to communicate What will it look like? Day in the Life video. Pilot demo space featuring the new workplace design 2/6/

14 Step 4: Communicate the vision Respond to the question: What is in it for me? Every vehicle possible should be used to communicate the new vision at all levels of the organization. Seek trade-offs and focus on the benefits of the program to gain support for AWA. A calculator to show how much employees can save per month on commuting and other costs. Specific company incentives include up to $1,000 in technology purchases and reimbursement for phone and internet. Listening to concerns and responding with creative solutions generates trust. Demonstrating that you have done your homework and explaining the rationale of the program also builds trust. Employees must to feel they are stakeholders in the overall change process and achieve their buy-in prior to investing in physical workplace changes. Continue communication once the AWA program gains traction. Provide training on how to work and manage in an AWA environment. The more frequently people are exposed to new concepts, the more receptive they are to change. John Kotter s research observed that buy-in from about 75% of management is required for a successful transformation over time. 2/6/

15 Brand your change mywork Evolving Workplace (AT&T), Citi Work Strategies Flex Office (Oracle). Bluework (American Express 2/6/

16 Step 5: Empower others to act on the vision Identify functions that could most benefit from AWA to serve as early adopters. Advice from corporates: A group of 200 to 500 employees is a good target. Early adopters can help make the vision a reality, but expect that the overall implementation process can take two to three years. Job functions in the private sector that are well-suited for AWA include administration, technology, staff support, and engineering. Find a work group that is already asking for more flexible working arrangements. Labeling early adopters as pilots can undermine the overall message of AWA as a permanent change in how the workplace is used. bptt s Port-of-Spain Lithium Technologies Fairfax, VA 2/6/

17 Demonstrate the potential impact of Alternative Work Strategies Implementing Alternate Work Environment Strategies: xx% of SBUs in the portfolio indicate high potential for alternative work environment strategies and are projecting high growth. 100% 90% 80% AO Strongly Suitable 70% xxx square foot reduction of occupied area could be realized if xx% of portfolio space is redesigned to alternative office format. 60% 50% AO Suitable AO Strongly Suitable AO Suitable 40% Portfolio carbon footprint reduced by xx% through use of alternative work environments! 30% 20% AO Modestly Suitable AO Modestly Suitable 10% AO Difficult AO Difficult 0% 2/6/ /6/

18 Step 6: Plan for and create short-term wins Deliberately plan for short term wins to create visible performance improvements. Document and communicate the benefits achieved by early adopters to help generate excitement and momentum. Recognize and reward employees involved in the change process at this stage. Several of the companies at the workshop described how their early initiatives produced results that catalyzed their programs. Multiple sources of performance measurement individual, organizational, and real estate related, must be applied. With more collaborative and less individual space, the new workspace can better meet the needs of how people actually worked together in that group High utilization breeds collaboration, while high vacancy breeds more vacancy. Klout, San Francisco New York office 2/6/

19 Step 7: Consolidate improvements and produce still more change Do not be satisfied by early wins. Continue the change process until it becomes the normal way of doing business. Look for ways to continually improve your alternative workplace strategies as they expand. Kotter: Work to change systems, structures, and policies that do not support the vision. Consider hiring, promoting, and developing employees that are able to implement the vision. Advice from corporates: One company estimates that about one-third of their workforce is currently eligible for AWA but it takes time to roll out implementation. Group managers always asked for more space than what they end up using. Therefore, we now build-out less space than is actually requested and wait for actual demand to be documented before we build additional space. Mobile workers weren t fully integrated into the culture so now we are implementing policies such as requiring employees to come into the office a certain number of times per week or for certain meetings. Recognize there will be geographical differences in how people use drop-in spaces. Different issues come up when transitioning new or existing employees to AWA and that policies are need to respond to both types of employees. Some employees may never adapt to AWA even though their job fits the profile. Such individuals may still be valuable to the company and must be accommodated. We look for inspiration from our international locations where space and energy is far more costly than in the US today. 2/6/

20 Step 8: Institutionalize new approaches Articulate the connections between the new workplace and work processes and corporate success. AWA is a constantly moving target. As technology and work practices continue to evolve, so will the workplace. Therefore, CRE leaders will have to constantly assess their strategy and adjust their programs to remain relevant. Our ultimate goal is not to have any dedicated work spaces. EBay prototype offices Valerio Dewalt Train Associates 2/6/

21 Download Alternative Workplace Implementation as Change Management at our website Also available as a 50 minute presentation. Martha O Mara, Ph.D CRE martha@cpanalytics.com